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2017 (4) TMI 170 - AT - Income TaxAddition of the land development expenses - Held that:- AO has not drawn interfere from case of any assessee who was engaged in the business of land development.The nature of assessee's business is altogether different. It is to be seen the nature of expenditure incurred and element of profit involved in the land development activities, it cannot be compared with the manufacturing of oil, cake etc. Thus decision of Vijay Proteins Ltd. [1996 (1) TMI 144 - ITAT AHMEDABAD-C] cannot be a guiding factor for estimating disallowance out of expenditure at 25% in a case where activities of assessee is of land development. Section 44 AD provides estimation of profit at 8% in the case of assessee who was engaged in construction activities or doing contractual job. Though this guidance of estimation of profit at 8% is for those assessee’s whose turnover is less than 40 Lacs and we are not strictly using it, but for the purpose of exercising our discretion as to find out what could be element of inflation in claiming expenditure at the end of assesse, we just tookcognizance of this section. Taking into consideration all these aspects, we are of the view that end of justice would meet if the expenditure out of land development could be estimated at 10% for disallowance. - Decided partly in favour of assessee
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